Business Acumen Part 2 : Going Bananas

Sometime in 1983 my older brother Beski had started banana business. He bought about 10 bunch of raw bananas (the whole stem), he would ripen them at our garden, and then would supply it to the grocery stores and tea stalls nearby. As his business increased, he built a small room where he could keep about 100 - 120 bunches of bananas (each weighing between 5 kilos to 20 kilos). This room was specially designed. It had no window. Just a tiny door of about 24 inches wide and 36 inches tall. It also had a small hole on top and came down like a tube; one cannot see the hole. The tube structure reached the ground level and was exposed down below. 

He would buy the raw bananas from Athoor market where the auction took place around 2.00 a.m (you read it right), and then he would bring them by a rented bullock cart or occasionally a tractor, while he returned by his bicycle. The bananas reached by early morning. I would join him to put all these to be stacked inside the room.  Once all the bunches were stacked, we would seal the room with the small door, and put little mud all around so that no air can escape in or out. Then the fun started. We would burn few dry banana leaves that came with the bananas at the exposed portion of the tube. It was important not to set too much of fire, but there should be lot of smoke. The smoke would go up through the tube into the room. We had to do it just for about 2 minutes, nothing more. This was good enough. The smoke would remain inside, and keep the bananas warm.

Next morning, when we opened the door, the bananas were ripe. My brother would personally reach all the bananas to shops in our village, neighboring villages and the nearby town. However, as demand increased, and that he could not reach so much to some shops, he would ask me to drop a few of those bunches (it was always carried in whole bunches along with the stem, not just the hands) to known shops. He gave me a rupee per bunch. I saw that there is a business opportunity here.

Sometimes, the smaller bunches with less than or around 50 bananas or smaller sized ones were not much in demand. We would be sitting around a whole bunch of bananas and finishing them all. But, still there was more as he had to take the whole lot in auctions. He can't be choosy there. Often the smaller bunches came at an average cost of 50 paise to one rupee (100 paise = 1 Indian rupee). On Sundays and on holidays, I would make a deal with him. The deal went like this.

Say, he had 10 bunches, and the total purchase cost was 8 rupees. I would agree with him for a sale of the same at 15 rupees with 20% commission, and anything above that would be mine! I would take all these bunches on our tri-cycle that we had, and would place myself around 8.45 / 9.00 am outside the fish market in the village. It is the time when maximum number of villagers came to the market to buy the fresh catch of fish. I would start yelling standing on the street near the tri-cycle, calling them out to buy the bananas. The best one would go at 5 rupees, and the not so good ones would go at 2 rupees. I would end up making about 30 - 40 rupees in about 30 - 40 minutes.

Once I am back, I would take out exactly 12 rupees that I would give to my brother. Account was cleared: 20% of the agreed sum of 15 rupees was 12. So, he got 12 (4 rupees in profit), and I got anywhere between 17 - 25 rupees. When he comes to know from the villagers or often from me that the people got good bananas at just 5 rupees, he would be in shock! He would come back and ask me what was my total sale was, and ask for the 20% of the whole sale. But, I would insist that, what was agreed was agreed! And my parents too supported. He was fun! We loved each other so much, and he would always ask me to take more bananas to the market!

After my father's death, this business model helped me a lot to save money for my education. I remember him fondly today. 

Post-script: Unfortunately, his business did not last long.  It was sometime in late 1986, he was robbed of about 3000 rupees that he had taken for the auction to buy more bananas. The business came to a grinding halt within few months, as he could not catch up with the business loss.

Business Acumen Part 1: Little Kid Adventures

How do we learn business? Some do it in business schools, some learn it from parents, some do it by being in business, and some learn it by sheer grit. I had seen money lenders visiting my family, taking away some hard earned money as part payment against the money that my father had borrowed. Often it was very tough for them to pay back the money. I had seen bank notices at home coming on printed inland letters mentioning of pending dues or a probable sale notice. My father would borrow more money from someone, take it to the bank, pay off the interest, and procure fresh loan. I vividly remember instances when our family lost ornaments as the bank monetized them. 

Money was a rare commodity. My older brother's grocery store in the village was a small one, and often it did run at loss as family took things from the store, and we expected that the income was so big that it could replenish the capital. But that wasn't so. However, hardly I was six years old I began to spend a lot of time at the shop. In weekends, and at times during lunch break at the school I would be hanging around there. It helped me to learn quickly on: measurements (both weights and liquids as oil was sold in milliliters, and other things in grams and kilos), and calculation of money that had to be done quickly, and often in mind. Learning mental calculations is critical to learning mind.

The games that we played as kids also meant a lot of calculations that had to be done. The well known goli-danda (marble and stick) or, just playing marbles at its various versions, and playing ball with a small bat where you were alone against several opponents required enormous calculations. I learned it early that there was an opportunity to make money - both in games and at home. 

I bought three marbles for 10 paise (one tenth of a rupee), and I would play well. If I played well, I could win marbles from others. So, initially I took my opponents strategically, and once I gained expertise in the game, I knew I could win anyone in our street. Now, what did I do with the marbles that I won. The logic was simple: the shop sold single marble at 5 paise, and three marbles for 10. I sold it to the boys from whom I won and other children of my age at a cheaper rate. I gave 2 for 5 paise and 4 for ten. It was a good bargain for them. So, they bought the marbles that I won from them, then they bought it from me by giving me money, and they lost it again to me in games! Kind of addiction that had built into them had kept my business going. I was just 7 or 8 years old then. At times I had more than 10 rupees which helped me buy some books or stationary for which I didn't have to depend on my parents. And I could always depend on my collection of marbles that were anywhere between 50 - 100.

One day, my mother asked me for two rupees to buy fish as she didn't have money. I gave her the money on the condition that she should return it with some interest. She returned it the next day with 50 paise added (100 paise = 1 Indian rupee). I thought this as a good idea. My mother, and even the neighborhood women, most of them relatives, needed money to fend of some emergency. Often it was between 50 paise to 2 rupees - may be to buy fish or to do some grocery. I had a simple logic in my interest rate:

Per day interest rate:

up to 25 paise : 5 paise per day

26 - 50 paise : 10 paise

51 - 75 paise : 15 paise

76 - 99 paise : 20 paise

1 rupee : 25 paise.

So, if you took 1 rupee for three days, you would end up paying me:

On day 1 : 1.25

On day 2 : 1.25 + 30 (interest of 25 paise added on top of the 1 rupees interest) = 1.55

On day 3 : 1.55 + 40 (interest of 1.55) = 1.95

In other words, I had my money doubled in three days. My mother would say, "I can borrow from any money lender, but not from my son!" And then, she would laughingly and gladly would borrow from me. Even others helped me my borrowing from me. The reason? They all knew that I used the money to take care of my little expenses, and at times I helped few very poor kids.

(The second part : "Business Acumen Part 2 - Going Bananas" will be published on 18 April 2020)

  

Lock Down

Corona has hit. Often this is labeled as the disaster of the century, as it crosses national, political, religious and any other human border one can imagine. Since its humble beginnings in Wuhan in China, it has crossed to over 150 countries and has taken over 23,000 lives as on 27 March 2020. The entire human race is behind closed doors across several countries in order to ensure "social distancing" - as the key to fight the virus that has virulently fought to keep its presence by the act of few who become the detonators in local communities. Doomsday sayers have  written off part of the human race, and the global economy seems to be shrinking. Politically, whether one is left or right, it doesn't seem to matter any more.

The schools closed first. Then the malls. And soon the whole nation shut its doors. There have been several good examples and a few bad in the process. The way people have been organized to do shopping in grocery stores in West Bengal state has been praised across the globe. Several other states India have replicated it with some twist into the thing. News has come in that the Indian railways plans to convert each coach of trains into isolation wards - which enables every coach of train can be converted to a 10 bed separated mini hospital. More clarity needs to emerge on how they plan to keep electricity to be running 24x7 and with the summer arriving, will only the AC coaches be converted into such isolation wards. But, the thought is good and important. India is aggressively looking to contain the disease as we are moving towards the first 1000 of the patients.

There are also some gaps in the initial days of this national lockdown that began in three days ago. One serious gap is in ensuring supply chain for grocers. This needs exceptionally clear plan as materials have to move from farm to homes without break. Personally I feel that we would have this lockdown extended as the number of cases in India continues to rise, and we get better control of it and be in a position to prevent the spread in a month or so. This means, we need to short-circuit the supply chain. Materials should reach from farms and large warehouses to groceries across the country without going through too many human hands to reduce  infections. One way could be combining the logistic capabilities of Coke, Pepsi, Haldiram, Hindustan Unilever, DHL, DTDC etc and state specific major supply chains such as Modern Bread in some of the states for delivery up to grocery stores, along with utilization of Swiggy, Zomato and UberEats for home delivery exclusively for senior citizens.  Any of our software majors can come up with a platform which can be utilized by all stakeholders to ensure smooth flow of groceries and vegetables on which the above mentioned supply chains can operate along with State administrations. People falling hungry can have huge social impact and may give way for unrest. Better that we put in some effort on this.

After all, children can't go hungry. And children can't wait.

St. Thomas Academy

Our children have fully settled at St. Thomas Academy on St. Thomas Mount in Chennai, India. I and Shubhra had visited the school in the third week of May after checking through some of the well known city schools. Some of them said that they did not have place. One fo them wanted the children to be brought down to Chennai to take a test, after which they would approve or disapprove based on their performance in the test. A professor friend suggested us to go to another school. The school said that they are happy to support parents who are on transfer. And they said that the annual fee would be just 28,000 rupees. We were happy. And we were asked to meet a teacher. She called us aside to say that the 28k was the annual fee. But we have to give 200,000 rupees per child donation to the school. We were dumbfounded. We left the school considering that 400,000 would be way high for us. As we were perturbed by the situation, another friend called and asked me to speak to the Provincial of the OMI province in India - Fr. Chinnappan. He was very soft spoken, and he immediately called couple of schools and told them to consider our request. The first one, though we were very happy, since our children do not know Tamil at all, and that the school environment would have required some amount of Tamil, we opted out for the second one - St. Thomas Academy.

When we visited, it was still 10 days to the restart of the school. The school looked a bit dry with no trees around. We were very concerned if the children would really appreciate the school. We met the school Correspondent and spoke with the Principal over phone. After that we were taken on a small tour around the classrooms by Ms. Priyanka, the one at the front-desk. We decided on the school. The school administration was considerate to give some concession too, as we were willing to pay for the whole year upfront for both the children. And the academic year began on 7 June 2019.

Though it had been scheduled to start on 3 June, due to water scarcity in Chennai and the heatwave, the government had asked all schools to start on a later date. The beginning of the children at the school began with great appreciation from our daughter as she was so happy at the way the teachers took care of her and the pedagogical methods - for her age.  (Will write about it more later). 

Shubhra joined the school in end of October as a Wellness Teacher (part time). On 7 Dec, the school had an inspection. I thought of sharing a short video on the event which was released by the school by the evening of 7th itself to give some understanding about the school.

Taxes and Tax Regimes

Most citizens consider taxes as burden in any country. More so in India. The reason is very simple: Our taxes keep changing with every budget each year. We also have moved from several tax systems to single but difficultly layered taxation. We are told that that even after nearly half of the month since its start, many businesses - especially small, micro and medium businesses are not ready. The reason for complexity is simple: whatever we have done, we just have no clue on how to simplify things.

There are more than seven slabs, and some items that are beyond the grasp of taxation in the country, although one can count on just three types of goods and services: Essentials, Non-Essentials but useful, and Non-Essentials / Harmfuls. Bringing goods and services into simplified procedure would have benefited the most and built transparency and accountability within the tax regime. Essentials should be taxed at 2%; Useful may be taxed at 8% and Non-Essentials to be taxed at 18%. 

I feel that one of the items that must be some how taxed is the Cash Transaction per se. Since small cash transactions will continue to hold forte in country with huge rural economy and unorganized economy (e.g. most grocery stores in small towns and rural areas never give out vouchers even if their turnover is more than 50,000 each day). Since cash cannot rotate unless it is withdrawn from a bank, I would go for a straight taxation of 2% on cash withdrawals. Now the fear is, people may not like to deposit what they have withdrawn! To incentivise it, give a 1% bonus on every cash deposit. In other words, when I withdraw INR 100 from bank, I pay 2% tax to the government. So, effectively, my account is debited 102 rupees. But, when the fisherman from whom I purchased fish deposits the money with the bank he/she gets 101 rupees. 

The government must remove banking charges on electronic transactions except for amounts more than INR 5,000. This would ensure that the banks get their service cost, while the poor who use the lower amounts are not virtually discouraged from using electronic medium of transactions.

Building Hazards...

The bye-pass road of Bolpur is being widened. The road was dug up to couple of feet on one side, and then the work was stopped for months. Now it is dug again, and the works have resumed. However there is no sign where the existing road ends and the new digging starts. At least some markers and indicators must be put to show that there is a hazard just on the left of the vehicle that is driving on the left side of the road. It is not good enough to build good roads. We must also ensure that we don’t build hazards with them!

That takes me to the lane from near Kalishaher temple towards Rathindrapalli in Sriniketan, near Shantiniketan / Bolpur. Yesterday, 13 Nov, while biking on the road, a car came opposite of me. When I went to the left side of the road, I saw a deep crate that was totally unprotected and was supposed to function as drain! Some how I managed to balance myself and didn’t fall into the ditch. I am sure that this is a normal site of Bengal…and probably that of the country as a whole. Departments think within their own boxes. So, the gentleman who plans the road just doesn’t care about the drainage as that is of another department…and doesn’t even bother to put up a signage or marking or a railing to protect the travelers on the road.

These are people who build hazards, not pathways. Government’s post-completion audits must include number of hazards added after its development works are completed, and also such engineers who execute faulty plans must be punished.

.First Fruits of Labor

The first batch of the Affirmative Action training that started after I took over in Kolkata is over. Out of the 36 who had joined initially 31 of them completed the training, and eight of them got the offer at TCS. I am proud of the eight. But it also raises some fundamental questions within me. Though nearly half of the students were tribals in the category, not a single one of them had got through! Just one tribal girl had passed the aptitude test, and had failed in the face-to-face interviews. There was one Krishna Methe. She was very confident and postured when I visited them on 20 May, and spoke rather well in English. But she had failed in the aptitude test.

Something bothers me: why are girls failing a lot in the aptitude test? What stops the tribal students from achieving more when equal opportunities are given? What has to be enhanced to give them further support. Do we need to build differentiated training into the curriculum? Do the tribal students need more hours of training or slower pace of training? Do the girls need additional hours spent in aptitude and mathematical sessions?

Or, do we need to engage different training skills for different communities and gender? Only more experiments over the coming months can say. For now, the first fruits will join TCS shortly. I am proud of them. Welcome to the corporate world, associates!

Joblessness to Earning: Job Seeker to Job Creator

India has taken the challenges of joblessness among the youth with greater sense of urgency. The efforts though are slow and progressive, there is a need to expand initiatives with huge participation of corporate agencies, local government bodies and civil society. There is a need to target different age groups with different educational background. The challenge would also be to build skills in limited time so that multiplier effects are seen and served. One estimate shows that there are over 8  million youth coming out of our colleges each year! Now that is a challenge.

The former President, Abdul Kalam, used to say: Our youth must become job creators, and not job seekers. Availability of easy loans and various subsidies given by government to promote job opportunities are only the starters. The main menu should have: (a) facilitating registration of all employees even in smallest business in the country; (b) a strong churn management framework to route the skills of employees churned out from various industries and utilize the same for other useful purposes; (c) roll out mega plans for building micro, small and medium enterprises that actually employ a lot more persons per revenue; (d) review education system across the country to infuse employability at various levels of education and broad base opportunities considering linguistic and ethnic diversities. For example, whether a doctor learns biology and surgery in English, Hindi or Bengali or Malayalam or any other language should little matter. These are matters that do not change because science behind it is the same. So, classification of jobs based on skills and knowledge need to be appropriately managed to ensure that literacy deprived are not socially and economically secluded.

One final point: stop all taxes and cut down the size of government. This would reduce unnecessary hassles. Simple system of "transaction tax" should be brought in except for companies and institutions which  deal in profit and loss. Transaction tax would be like: for every spending and income up to 200,000 rupees, say 1 % tax is automatically deducted at the time of receiving and at withdrawal or payment; for higher slabs increase the interest rates. So, every time one withdraws or spends, the person pays tax. This would keep the social principles of the rich pay more, while ensuring parity and transparency. But for that, we have to move faster towards plastic currency at every step. Once money is open, people won't mind spending. And spending is the essential for any growth and growth is a lot about jobs and earning.

Global Gridlock - National Pain

In a recent speech, Bill Ford (great grandson of Henry Ford) questions what happens to the world if our cars and trucks double, triple and quadruple? With cars becoming more and more affordable, with focus on elimination of CO2 emission almost looking straight into our eyes with electric cars and improvements in technology working together, we can see a day when environment and vehicles coming closer to one another, and probably coexist in harmony.

But we are left with a greater challenge that is not getting adequate attention: the freedom of mobility! Bill Ford estimates that by 2044, when the world is expected to reach its peak population of about 9 billion, we would be having about 2 - 4 billion cars and other vehicles on earth, from today's 800 million. And most of this growth is expected to take place in the developing world!

We are heading towards a national gridlock, whereby we might be spending time in our vehicles more than at home or work. This is already visible in several major cities of the world - where adults have begun to carry mobile toilets in their cars or wear adult diapers, and carry food as one expects to remain stuck on road due to traffic jams. Remember the 100 mile long traffic jam of Beijing that took 11 days to clear? Aren't Indians spending about a week per year, just stuck in traffic jams alone, already? What a waste of our life and resources. Rapid urbanization with more and more people choosing to live in urban environment will add up to this huge maze. Will we end up with a global gridlock? 

India's motor vehicle sale per 1,000 persons is growing at a rapid rate of 18 persons adding up a car or a three or four wheeler each year. India is the sixth largest motor vehicles manufacturer in the world today. Increase in road space can never catch up with this demand and supply chain. After all, as Bill Ford says, "four billion clean cars are still four billion cars! A traffic jam with no emissions is still a traffic jam!" So, finding alternate technological and people friendly solutions are a must.

a) Integration of ticketing system, as done in several cities of the world must be implemented right from now with use of smart cards that can be punched at buses, train stations, metro rails and even rental cars.

b) Smart solutions by way of car pooling has to improve with focus on shared services.

c) Smarter cars that can talk to one another, predict a grid lock and allow one to take alternate routes for improving mobility

d) Smarter roads and parking lots that can speak to cars whereby one can book a parking lot even before you arrive to ensure that one doesn't keep travelling around to find a place.

e) Stronger laws to ensure that every housing complex comes with adequate amount of space to park as many cars as there are apartments. (A walk across places like the South Extension in New Delhi would make sense of what I am saying where vehicles are parked for days and weeks at times on the road, as most houses do not have adequate parking spaces in their own house.)

f) Mandatory following of lanes, with segregated and safe lanes for different types of vehicles

g) Work stations to come up with expected number of employees, and housing complexes within the work station area. For example, if a company comes up with a plan to engage 2,000 employees, the complex also should have place for at least 1,000 employees to live close by, within walking distance. This would greatly reduce commuting time and vehicles on the road. Companies can easily reap the benefits of it as they need not organize transport and can also charge nominal amount as rent while the staff will be available to the company even during emergencies, or say, even if there is a national gridlock of traffic jam!

Managing Cities : Developing Outwards is better than Developing inward

Every Indian city seem to have some common woes : transportation, water supply and solid and liquid waste management are the most common, directly affecting people and their health. Services come next with affordable access to health and education being the biggest dragging points with ever increasing population. Let us take the case of transportation for our discussion.

There are three approaches to solve or reduce the problems of commuting in a city context : (a) increase road space - by widening the roads, laying new roads and flyovers; (b) reduce the number of vehicles that hit the road - essentially through levying of special taxes or by rationing of roads. This is again, an attempt to increase the space per vehicle ratio, so that vehicles can move faster than 20 km per hour speed, below which has been the bane of city transport. The third solution is through (c) improving intelligence. This is done through intelligence based signalling, technology providers linked with transport monitoring and updating suggested route and possible time of arrival in real time etc. Basically this is technology driven. The fourth generation solutions are looking at the star wars style of working to create "flying cars" and these seem to be still far away. With fear of terror strikes even at the thought of baloons and drones flying above, the chances of creating controlled corridors for such flying cars, even if technically feasible, to use of them for regular commutation seems far fetched. This leaves us with searching for transformational solutions.

The cities need to be seen differently. The cities come with an implosive nature of attraction - which means, people, services, transport et al keep increasing through high immigration and inputs, and then implode from within as the services and infrastructure can not cope with the people and demands for mobility. So, cities need to be built differently. They should be explode externally (leap frog to) to far off smaller towns. This means, cities should not be adding up, or eating up suburbs into themselves. Instead, specific growth factors should be taken out of the city to enable them to grow faster, better and with lesser strain on the cities and its populace. For example, take the case of Mumbai. The pressure on Mumbai was reduced when the focus on Pune was increased. The Expressway added to the spread and growth of Pune and the towns along the with, with lesser pressure on Mumbai - at least it gave the benefit of moving from rapid urbanization to a slower urbanization. Such satellite cities and districts need to be built with additional incentives. For example, if West Bengal need to reduce the burden on Kolkata, quality of Universities and Colleges need to be improved in other parts of the state. Say for example, Murshidabad district can have a Special Economic Zone for crap and hardware processing, Malda can have SEZ for food processing, Puruliya or Bankura can have SEZ for Researches, Burdwan and North Dinajpur can have SEZ for health etc. These kind of spreading and special incentives can have long term impact on the overall economy of the state, short term benefits of reducing migration influxes, and overall benefit of sustainable development and economic growth. Simply, it means, build satellite townships and districts across the states, and not in major cities and metropolis alone. It comes without saying that connecting each of them would cost less than managing mammoth cities.